''Legislation is before the Cabinet. We tried to get it put through in the last Parliamentary session,'' Mr. Margo said.

''Now, I have had discussions and learned that it will not be reached this session,'' and will be delayed until next year, he said. Frequent Abuse

Tony Norton, president of the Johannesburg Stock Exchange, said investigations by exchange officials had shown frequent instances of abuse of privileged information to gain an unfair advantage in trading.

''We have gotten tired of doing these expensive and detailed investigations and handing over the results to authorities who are unable to prosecute because the underlying law is patently inadequate,'' Mr. Norton said in an interview.

At least 10 cases have been submitted to police in the last decade, but not one has resulted in prosecution.

Officials feel impotent in dealing with the related and growing problem of companies that flout the exchange's rules on mergers and takeovers, he said. Regulation Often Defied

The regulations demand that bids for control of public companies must offer minority shareholders the same terms as majority stockholders.

This regulation is frequently defied, and the exchange expects the problem to worsen as the local market becomes more active and sophisticated.

Critics in the investment community reproach the exchange for failing to police its own rules by suspending the shares of companies involved in controversial takeovers.

Mr. Norton said the exchange's power to enforce its regulations is inadequate: ''We have had to carry the responsibility alone, when it is a responsiblity for the whole securities industry.''

The standing advisory committee on company law headed by Mr. Margo has combined elements of the United States and British systems in proposing a new regulatory system. Takeover Panel Proposed

It suggests using the British system as a model for a panel of stockbrokers, corporate lawyers, accountants and institutional investors to examine takeovers.

Like the United States Securities and Exchange Commission, such a panel would also be empowered by law to make and enforce regulations.

Under proposed changes to the South African Companies Act, the panel would be charged with halting insider trading and would be able to investigate cases of suspected insider trading. It would also be able to subpoena witnesses and documents.

The panel would hand over cases for prosecution to the Attorney General, whose staff until now has seldom been qualified to investigate complex deals.

Mr. Margo said the prosecution of the arbitrager Ivan F. Boesky in the United States and the filing of charges in Britain over a takeover deal by Guinness P.L.C. showed that those countries were serious about fighting market abuses.

''There is no general appreciation in South Africa of the evil of insider trading,'' he said.